Sheldon Adelson paid $140 million for the Las Vegas Review-Journal (R-J) on December 10, but he didn’t reveal his involvement in the acquisition from New Media Investment Group, the paper’s former owners, until a week later.
The secretive nature of the transaction sent R-J staff into a frenzy to try and uncover who they were now working for.
Adelson said the delay in a public announcement was due to his Venetian resort hosting the fifth and final Republican debate of the year.
“The Adelson family has called Las Vegas home for nearly 25 years,” the Adelsons said in a piece published in the R-J on December 17. “We are proud to announce that the Adelson family has purchased the Las Vegas Review-Journal through a wholly-owned fund, as both a financial investment as well as an investment in the future of the Las Vegas community.”
Adelson’s fortune has been generated from his Las Vegas and worldwide Las Vegas Sands casino properties, however, no single person is more adamantly against online gambling and Internet poker.
The dawn of the Internet and expansion of the World Wide Web has led to the erosion of the newspaper industry. Investing in traditional physical papers hasn’t been an attractive venture for at least 15 years.
Since 2005, revenues for newspapers have dropped by more than 33 percent. Print advertising has fallen from a nearly $50 billion annual market to just over $15 billion in 2014.
Media outlets have tried to offset costs with digital subscriptions, but by and large it simply hasn’t worked.
Paying $140 million for the R-J is certainly no bargain, especially considering New Media Investment Group purchased the paper for just $102.5 million exactly nine months ago. A 27 percent return for New Media, but a 27 percent premium for Adelson.
Skeptics of Adelson’s purchase are concerned the billionaire plans to use the medium to push his conservative stances.
R-J gambling industry columnist Howard Stutz expressed his fears via Twitter by saying, “Announcement from newsroom in Las Vegas makes my stomach hurt.”
While many journalists are decrying Adelson’s involvement with a major newspaper, he certainly isn’t the first billionaire to enter the industry.
Amazon Founder Jeff Bezos purchased The Washington Post for $250 million in cash in 2008. Founded in 1877 and the most widely circulated newspaper in the nation’s capital, The Post’s struggling financial situation wasn’t seen as an investment opportunity to Bezos but an experiment.
Bezos took the paper private, meaning it no longer needs to report quarterly earnings or be subjected to shareholder demands.
The newspaper had a long tradition of not endorsing political candidates in order to maintain a neutral editorial. However, that changed in 2000 and The Post now occasionally endorses candidates, primarily Republicans.
Bezos’ left-leaning politics has slowly altered the traditionally moderate paper. Just this week, The Post published a cartoon depicting 2016 presidential candidate Senator Ted Cruz’s (R-Texas) young daughters as monkeys.
As the race for the White House heats up, so does the spending by the wealthy. Two billionaires now solely control two of America’s leading papers, the Washington Post #7 and the R-J #22 in circulation.